US Dollar / Chinese Yuan (USD/CNY) Analysis

It’s very slow moving, but the down-side trend of this currency pair continues. My reason for suspecting a down-move, and not a continuation of the short term up-trend (as mentioned in last week’s column), was primarily because the pattern of price on the chart, from July 17th to August 18th, 2008, had more of a corrective appearance than that of a new bullish trend. And so it has been.

Caution should be exercised since there is a possibility of a snap-back test of the resistance around 1.6835 (R1 on the chart), which if it occurs is not likely to do any damage to the long-term downtrend.

Apart from that possibility, the main direction is still down and a new test and probable break of the current low at 6.8004 (S1) is imminent.


Daily USD/CNY chart as at 28 August 2008 using NextVIEW Advisor

NextView RSI – pointing down, but not yet convincingly.
Bollinger Bands – indicates that the momentum is down.

Commentary and Analysis by Don Schellenberg